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Making $en$e of Vincent Lecavalier's Future with the Tampa Bay Lightning

Vincent Lecavalier's tenure with the club that drafted him first overall in 1998 has been a stretch of lean and occasionally tumultuous seasons interrupted by a cluster of four consecutive postseason appearances that included a Cup and, several years later, another deep playoff run. Though the Lightning's first bona fide superstar and despite widespread admiration for his efforts on and off the ice, Lecavalier has been dogged (see Exhibits A , B, C, D and E) at various junctures of his professional career by speculation that he is or should be destined for some other hockey market.

Knowledge of these episodes has no doubt kept the prospect of his departure from the Lightning simmering, but it's the succession of injuries and diminished production following an 11-year, $85 million extension signed in 2008 as well as the arrival and rapid emergence of new No. 1 center Steven Stamkos that have really stoked the flames of conjecture. What was once a confluence of impassioned, covetous rumor-mongering that served as a grim specter for those concerned with the state of the Lightning has become a discussion steeped in practicality for fans and pundits alike.

There has been a nearly singular focus in recent seasons on the hefty price tag that comes with icing Lecavalier, though this concern, as the previous CBA approached expiration, has really come to hinge on the average annual value ($7,727,273), or cap hit, of his contract rather than the actual salary. The deal was the creation of the team's previous owners, the much-maligned OK Hockey group headed by Oren Koules and Len Barrie. The franchise was rescued by current owner Jeff Vinik, who has increased his team's cap and salary obligations in each of the three full seasons he's been writing the checks.

Under Vinik, the Lightning have soared from among the top-five teams in unused cap space in 2009-2010 to among the top-10 of most-used cap space for the just completed 2012-2013 season. Even before the NHL officially announced the terms of its new CBA this past January (in particular, that the cap ceiling would drop from $70 million to $64 million), preliminary reports and coverage of league and players union negotiations had already spread the expectation that the cap ceiling would be significantly lower for the 2013-2014 season.

Thus, with the Lightning approaching and then surpassing $60 million in cap commitments for next season with less than a full roster signed, perception and discussion of a potential cap crunch (here's an early prognosis by baseball writer and SBNation Tampa Bay contributor Steve Slowinski) was inevitable. Recovering the cap space that Lecavalier consumes is at the forefront of proposed remedies, with just two options to do that available: trade the club's current captain or use one of the two "compliance buyouts" the new CBA permits through the end of a buyout period in either the 2013 or 2014 off-seasons.

Apart from a fairly detailed evaluation of buying out Lecavalier undertaken by Mike Burse of The Hockey News (it's worth noting Bolt Prospects was among several Burse credited in helping craft his piece), both measures were casually floated and dismissed by both fans and media with generally understood talking points (e.g. Lyle "Spector" Richardson weighing in). On occasion, some pass along fly-by prescriptions devoid of any analysis as pearls of wisdom (take, for example, Joe Yerdon of ProHockeyTalk nonchalantly suggesting to thousands of Twitter followers that, were he the Lightning's head honcho, he'd draw Vinik's ire because he'd try to "land Luongo" AND "buy out Lecavalier"). As we all get set to wade into the NHL's annual silly season, it seemed pertinent to take an in-depth look at each scenario.

TRADING VINNY

Let's state the obvious: though there is precedent for players waiving their no-movement clause (Jerome Iginla providing one prominent recent example), Vincent Lecavalier ultimately controls whether and where he gets traded. So, even if a willing taker for all or part (teams are now allowed to trade up to 50% of a proportional amount) of his salary and cap hit could be found, Lecavalier would have to give his blessing.

The other blatant obstacles are the cap hit and term, something Times columnist Tom Jones, in the same previously cited article, acknowledged makes Lecavalier "difficult - and maybe even impossible - to trade."

Assuming General Manager Steve Yzerman could get all of those ducks in a row, there's still an additional, if less-publicized complication. Under the league's new CBA, the length of Lecavalier's deal means it is lopped into a special class of contracts (7+ year terms, signed prior to the new CBA) affected by a particular provision. The Sporting News' Jesse Spector, responding in a late April column to a reader who asked on whom Spector thought the Lightning should use their buyouts, made a connection between Lecavalier and the "cap benefit recapture" process but was unsure if Lecavalier's contract would actually be subject and the Lightning would be affected or not.

Dubbed the "Luongo Rule," it is widely understood to be the league's retribution for teams using so-called "retirement" contracts with front-loaded salary structures for a lengthy term in order to generate more manageable cap hits. Specifically, should a player with one of these targeted contracts be traded and not fulfill the entire term (i.e. retire or defect to another league), the team that originally signed the player to the deal and the club that traded for him are potentially subject to a cap penalty spread equally among the remaining years in relation to any "cap advantage" (the difference between cumulative salary paid and cap space charged) gained during the player's tenure with both teams.

To gauge how much "cap advantage" the Lightning have already benefited from, we can compare the year-by-year salary and cap obligations to date:

Season

Cap Hit

Salary

Cap Benefit

Accrued Benefit

2009-2010

$7,727,273

$10,000,000

$2,272,727

$2,272,727

2010-2011

$7,727,273

$10,000,000

$2,272,727

$4,545,454

2011-2012

$7,727,273

$10,000,000

$2,272,727

$6,818,181

2012-2013

$7,727,273

$10,000,000

$2,272,727

$9,090,908

So, four seasons into Lecavalier's extension, Tampa Bay has received a total "cap advantage" of $9,090,098 it is already liable for should Lecavalier retire or leave the NHL to play in another league prior to the expiration of his contract.

Assuming the Lightning pursue and are successful in trading Lecavalier this off-season, here are the potential cap penalties the Lightning would face for any given year (presumably in the off-season) he might decide not to fulfill his contract:

Retires

Accrued Benefit

Contract Years

Annual Penalty

2013

$9,090,908

7

$1,298,701

2014

$9,090,908

6

$1,515,151

2015

$9,090,908

5

$1,818,182

2016

$9,090,908

4

$2,272,727

2017

$9,090,908

3

$3,030,303

2018

$9,090,908

2

$4,545,454

2019

$9,090,908

1

$9,090,908

2020

$9,090,908

0

$0

If maximizing cap space savings was all the Lightning was concerned about achieving, the best-case scenario is Lecavalier plays through the entirety of his contract after he is traded; otherwise, if he retires, the earlier the better for Tampa Bay.

Lecavalier deciding to call it quits during the off-season prior to his final contract year (2019-2020) is the worst-case scenario as the Lightning would face a massive, sudden shock to their cap structure. While it's hard to imagine Lecavalier deliberately putting Tampa Bay in a deeper bind, even if talked into accepting a trade, it's also plausible he would feel no sense of obligation to put off retirement for the sake of a franchise that sent him packing.

Further complicating matters is that, per the cap recapture provision, the team that traded for Lecavalier would become liable for any future seasons Lecavalier generated a cap benefit while playing for the organization. Here's a continued year-by-year breakdown for the remaining term of Lecavalier's contract for each season he might play with his new team:

Season

Cap Hit

Salary

Cap Benefit

Accrued Benefit

2013-2014

$7,727,273

$10,000,000

$2,272,727

$2,272,727

2014-2015

$7,727,273

$10,000,000

$2,272,727

$4,545,454

2015-2016

$7,727,273

$10,000,000

$2,272,727

$6,818,181

2016-2017

$7,727,273

$8,500,000

$772,727

$7,590,908

2017-2018

$7,727,273

$4,000,000

-$3,727,273

$3,863,635

2018-2019

$7,727,273

$1,500,000

-$6,227,273

-$2,363,638

2019-2020

$7,727,273

$1,000,000

-$6,727,273

-$9,090,911

Notice the table shows three seasons, all at the tail-end of Lecavalier's contract, where the cap hit is scheduled to be greater than the actual salary owed. This means whichever team Lecavalier is playing for would be receiving a negative cap benefit for those seasons. The club could not claim the amount of a negative cap benefit for a direct cap credit (i.e. to add to its cap space) but could instead receive a credit to off-set some of the accrued "cap advantage" Lecavalier's contract previously generated.

Thus, the cap ramifications for any club that might trade for Lecavalier this off-season should he decide to abruptly end his NHL career in any given year (again, presumably in the off-season) are as follows:

Retires

Accrued Benefit

Contract Years

Annual Penalty

2013

$0

7

$0

2014

$2,272,727

6

$378,787

2015

$4,545,454

5

$909,091

2016

$6,818,181

4

$1,704,545

2017

$7,590,908

3

$2,530,303

2018

$3,863,635

2

$1,931,818

2019

-$2,363,638

1

$0

2020

-$9,090,911

0

$0

It is clear that there is little downside, beyond having to assume a $7,727,272 cap hit and $45 million in salary obligations for a 33-year old who has passed his scoring prime, for an opposing club to trade for Lecavalier this off-season. His retiring at any point would save actual dollars and be very manageable cap-wise, but Lecavalier's doing so in one of the final seasons after providing reasonably productive campaigns might even be ideal for any trade partner.

It is true that trading Lecavalier this summer would provide Tampa Bay, at least initially, massive salary and cap relief but the net gain could vary widely over the years depending upon how he was replaced in the lineup. Also, as demonstrated above, the Lightning would be operating under the uncertainty of whether or not it would ever be hit with significant cap penalties due to the cap benefit recapture provisions of the new CBA.

What about waiting to trade Lecavalier?

It would behoove the Lightning, from a financial standpoint, to try and move Lecavalier as quickly as possible as Tampa Bay stands to gain a $2,272,727 cap benefit for the next three seasons plus an additional $772,727 in 2016-2017 that would magnify the potential cap penalties. It's hard to fathom the Lightning would decide to, or be able to, move Lecavalier in the twilight of his career but if that somehow came to fruition and he retired prematurely, the effect of a couple seasons with a negative cap benefit would keep the resulting penalty reasonable.

This table summary further illustrates the dilemma from the Lightning's perspective:

Traded

Accrued Benefit

Highest Possible Penalty

Lowest Possible Penalty

2013

$9,090,908

$9,090,908 (retires 2019)

$1,298,701 (retires 2013)

2014

$11,363,635

$11,363,635 (retires 2019)

$1,893,939 (retires 2014)

2015

$13,636,362

$13,636,362 (retires 2019)

$2,727,272 (retires 2015)

2016

$15,909,089

$15,909,089 (retires 2019)

$3,977,272 (retires 2016)

2017

$16,681,816

$16,681,816 (retires 2019)

$5,560,605 (retires 2017)

2018

$12,954,543

$12,954,543 (retires 2019)

$6,477,272 (retires 2018)

2019

$6,727,270

$6,727,270 (retires 2019)

$6,727,270 (retires 2019)

In and of itself, the cap benefit recapture provision isn't there's not necessarily enough to claim the Lightning will never, under any circumstances, trade Lecavalier. The but the cap recapture wrinkle adds a significant deterrent, on top of other imaginable roadblocks, for both clubs in any trade scenario.

Buying Vinny Out

Under the terms of the previous CBA, Lecavalier's deal was one of a number of contracts billed as a "lifetime" or "retirement" agreement because of length, a precipitous decline in actual salary in the final seasons, and the possibility of an early retirement before the expiration allowing the club to regain the cap space without penalty. As previously mentioned, the new CBA removed this advantage for those previously generated contracts that are seven years in length or longer with the cap benefit recapture provision.

While in Toronto this past week for the NHL Scouting Combine, Yzerman (surprise!) answered vaguely when asked whether Tampa Bay would pursue any compliance buyouts and, even more specifically, if the Lightning would use one on Lecavalier. Yzerman didn't outright dismiss either notion (probably because the Lightning will end up using at least one compliance buyout), instead opting to state that any decisions would be finalized around the draft, which takes place during the course of the buyout period. Some might find Yzerman's polite non-answer curious, but it would be highly unusual for the man running a team as tight-lipped as the Lightning often are to tip his hand and most general managers probably would have given a similarly evasive answer.

That the bulk of current speculation is centered on the possibility of shedding Lecavalier's contract via a compliance buyout seems to reflect recognition that it's a far easier path for the Lightning to trod than trying to trade him. However, what is noticeably absent from nearly all (Burse's work being the exception) of the relevant commentary is any scrutiny of the financial magnitude of actually doing so, as this table of the buyout costs involved for any year the Lightning might pursue a buyout shows:

Year

Salary Owed

Buyout Cost

Annual Payment

Highest Cap Hit

Lowest Cap Hit

2013

$45,000,000

$30,000,000

$2,142,857 (14 years)

$0

$0

2014

$35,000,000

$23,333,333

$1,944,444 (12 years)

$0

$0

2015

$25,000,000

$16,666,667

$1,666,667 (10 years)

$8,393,939 (2019-2020)

-$606,061 (2015-2016)

2016

$15,000,000

$10,000,000

$1,250,000 (8 years)

$7,977,273 (2019-2020)

$477,273 (2016-2017)

2017

$6,500,000

$4,333,333

$722,222 (6 years)

$7,449,495 (2019-2020)

$722,222 (2020-2023)

2018

$2,500,000

$1,666,667

$416,667 (4 years)

$7,143,939 (2019-2020)

$416,667 (2020-2022)

2019

$1,000,000

$666,667

$333,333 (2 years)

$7,060,606 (2019-2020)

$333,333 (2020-2021)

To understand the total cost of deciding when, if ever, to buy out Lecavalier, one must factor in additional salary paid.

Here are the total financial costs for every year he's eligible to be bought out as well as the total cap space that would be reclaimed:

Year

Buyout Cost

Additional Salary

Total Cost

Cap Space Recovered

2013

$30,000,000

$0

$30,000,000

$54,090,911

2014

$23,333,333

$10,000,000

$33,333,333

$46,363,638

2015

$16,666,667

$20,000,000

$36,666,667

$8,333,330

2016

$10,000,000

$30,000,000

$40,000,000

$5,000,000

2017

$4,333,333

$38,500,000

$42,833,333

$2,166,668

2018

$1,666,667

$42,500,000

$44,166,667

$833,332

2019

$666,667

$44,000,000

$44,666,667

$333,333

At first glance, it looks obvious that there's no better time to use a buyout than this summer or, at the latest, in the next off-season. However, there are actually additional costs that cannot yet be accounted for and instead require estimation. They include the value of the production Lecavalier would provide the Lightning in coming seasons and the salary and cap hit Lecavalier's replacement(s) would command over the years. Factored in, the financial benefits of a compliance buyout of Lecavalier would not look as advantageous, although Tampa Bay would no longer have to worry about the cap benefit recapture twist.

Some additional perspective: using a compliance buyout on Lecavalier would mean Vinik commits to making the longtime Bolt an unrestricted free agent whom he would have to pay exactly (this summer) or slightly more than (next summer) two-thirds of the approximately $45 million he spent renovating the Tampa Bay Times Forum. It would be roughly a third of the price Vinik reportedly paid to obtain control of the team, a staggering amount of money for him to fork over for a player to not play for his franchise.

Perhaps not having to make a lump-sum payment and instead having fork over only about $2 million for a decade and change makes the idea more palatable, but how much more so?

If one prorates the 10 goals he notched in 39 games during this most recent lockout-shortened season, he was on pace to hit the mark again. Lecavalier's 22 assists in 2012-2013 meant he finished with a per-game scoring rate (0.82) right in line with those of his last four seasons and if he hadn't played the bulk of the season hobbled by a foot injury, he might have hit the point-per-game mark for the first time since 2007-2008 when he posted 92 points through all 82 of the Lightning's games. Lecavalier had played a key role in the Lightning's hot start, notching four goals and seven assists in the first seven matches before a Sami Salo slap-shot severely bruised a foot bone which became fractured over a month later in a collision with Florida's Erik Gudbranson.

If the Lightning's brain trust is primarily concerned about adjusting for next season's cap reduction and expect the cap ceiling, as it each year under the previous CBA, to continually escalate over the duration of the current CBA, one is hard-pressed to believe they would pass up other, more cost-effective measures available. Measures that could come close to achieving the additional financial flexibility for the present and near-term a compliance buyout of Lecavalier would, at least initially, provide without sacrificing much, if anything, in terms of the team's competitive balance.

Take, for instance, deciding to try and trade Ryan Malone, or settling for using a compliance buyout on him instead. A trade could clear some or the entirety of his $4.5 million salary, depending on what the Lightning received in return or if it opted to retain a portion (up to 50%) of his cap hit and salary, as is allowed by the new CBA. Engineering a trade, though, might prove difficult, given that Malone presently possesses a no-movement clause that gives him a lot of control over where, or whether, he will be traded. This provision does modify to a limited no-trade clause come July 1, but by that point the clock will be ticking if the Lightning want to retain the option of buying him out as the window of opportunity, which begins 48 hours after the playoffs end, will reportedly expire on July 5th. Another foreseeable complication: Malone's preferred destinations (Pittsburgh likely being one makes for a good example) might already have difficult roster decisions to make in order to get cap-compliant for next season.

Electing to buyout Malone, who has two more years left and is owed just $5 million on his contract, is far more straightforward for Tampa Bay and a relative bargain: the Lightning could obtain nearly 60% of the cap space a compliance buyout of Lecavalier would return for a mere fraction (10%) of the cost. Yzerman might piggyback this by additionally, prior to next season's start, re-assigning Brian Lee back to the minors where he finished the regular season. Doing so would clear an additional $900,000 in cap space assuming he wasn't claimed off waivers, in which case Tampa Bay would gain $250,000 more in cap space.

Beyond this upcoming season, with the certainty of a number of contracts expiring (Brian Lee's, Tom Pyatt's, Sami Salo's and Dana Tyrell's in 2014; Eric Brewer's and Martin St. Louis' in 2015; Teddy Purcell's in 2016) and Vaclav Prospal's buyout cap charge coming off the books, Tampa Bay stands to regain a sizable chunk of cap space it can decide how best to reallocate. It will also help being able to often eschew relying on the free agent market in favor of promoting more affordable replacements from within thanks to the still-growing pipeline which is already producing NHLers. Then there is also the possibility of the cap ceiling rising over the next few years.

Lecavalier's contract, then, may become far less of a financial hindrance than it seems to strike many as at present. If he can remain a purposeful and contributing (even if "overpaid") piece of the puzzle for the duration, it's probably worth holding onto him and planning for the future accordingly. Doing so would be a calculated gamble, as his performance is unlikely to deteriorate to the point where he is a liability on the ice until he's in the last couple seasons of his deal and, even if he did decide to hang up the skates at that point, the resulting cap penalty would be lower than the cap hit the Lightning would otherwise be charged if he stuck around.

The following table shows how Lecavalier retiring in either of the final two seasons would actually result in minor cap savings:

Retires

Scheduled Cap Hit

Cap Penalty

Cap Savings

2018

$7,727,272 (2018-2019)

$6,477,772

$1,249,500

2019

$7,727,272 (2019-2020)

$6,727,270

$1,000,002

In short, Lecavalier retiring is a manageable situation if the club is prepared (ideally with an inexpensive replacement already groomed to to step into whatever role Lecavalier would be playing by this time) for the possibility.

If, though, Yzerman is determined to get out from under the burden of a massive contract he inherited in order to establish as much cap flexibility as possible for the long-term and Vinik has no objection to footing the bill, there is no better, no more expedient alternative to the incredibly expensive proposition of buying out (and replacing) Lecavalier now or next summer. Preference over when to do so might then come down to how (free-agency, trade or promoting from within) to replace Lecavalier going forward.

Years from now, observers may consider the coming decision on Lecavalier's future as the most critical made by Yzerman, now entering his fourth season as the Lightning's general manager, during his time at the helm. Whatever direction the Lightning will go, answers (or at least some of them), as Yzerman told the assembled media at the scouting combine in Toronto, are coming soon enough. Tick-tock.